From Njeri Kipkirui in Nairobi
Nairobi, Kenya: In a bold move to transform African agriculture, the African Development Bank (AfDB) has announced plans to launch a $500 million facility designed to unlock a staggering $10 billion in financing for smallholder farmers and agricultural enterprises across the continent.
Unveiling the ambitious initiative at the Scaling Finance for Smallholder Farmers High-level conference held in Nairobi recently, AfDB President, Dr Akinwumi Adesina stated that the Bank’s management is currently engaging with its Board of Directors to finalise the ground-breaking facility.
“We stand on the threshold of making history,” Adesina declared in his keynote address, emphasizing the need for innovative solutions and collaborative partnerships to bridge the critical financing gap faced by African farmers.
The facility will utilize a range of financial instruments, including trade credit guarantees, blended finance mechanisms, and origination incentives, to mitigate the perceived risks associated with lending to smallholder farmers. This will be coupled with technical assistance to further support these enterprises.
The announcement comes against a backdrop of significant progress since the 2023 Dakar 2 Feed Africa Summit, where African leaders committed to achieving food security and sovereignty. Financial commitments from development partners have surged, with the AfDB itself pledging $10 billion and approving numerous projects across 32 countries.
Despite these advancements, persistent challenges remain. Only a fraction of African smallholder farmers have access to credit, and financial institutions often view them as high-risk borrowers. Adesina’s initiative seeks to address these issues head-on, aiming to transform Africa into the world’s breadbasket.
The AfDB has also launched several key initiatives to support smallholder farmers, including the Technologies for African Agricultural Transformation (TAAT) program, which has reached millions of farmers with high-yield crops, and the African Emergency Food Production Facility, which has delivered vital seed and fertilizer.
Addressing the conference, Dr. Beth Dunford, AfDB Vice President for Agriculture, Human, and Social Development, urged for a collaborative approach, stating, “We must act now to change this reality.”
PAFO President Ibrahima Coulibaly echoed this sentiment, emphasizing the need to create jobs in the agricultural sector to combat hunger and poverty.
Kenyan Cabinet Secretary for Agriculture and Livestock Development, Senator Mutahi Kagwe, called for urgent implementation, stressing the importance of ensuring that no farmers are left behind due to lack of finance.
A panel of financial experts further underscored the crucial role of governments in creating an enabling environment for agricultural lending.
Adesina’s ambitious plan represents a pivotal moment in the effort to empower African farmers and transform the continent’s agricultural landscape. By unlocking billions in financing, the AfDB aims to create a more prosperous and food-secure future for Africa.
